Reducing Costs Through a Lean Audit Process
Lean process transformations, while widely accepted for improving procedures on the manufacturing floor, apply equally to back-office systems. The first step in optimizing back-office operations involves educating the administrative staff on the benefits of implementing Lean in their domain and engaging them to apply Lean tools. Once this culture is fostered, a company can expect transformational results.
Project Summary
When the CEO of a global industrial aerospace and controls manufacturer with over 100 legal entities in 35 countries received a $12 million invoice for the corporation’s annual Sarbanes Oxley review, he called on Lean Horizons Consulting to develop a better way. Although, there was significant skepticism around the water cooler that Lean could be applied to an audit process, Lean Horizons Consulting successfully demonstrated how Lean can indeed reduce the costs of this complex process for both the client and their external auditing firm.
In collaboration, Lean Horizons Consulting and the manufacturer developed a global, top-down, IT-focused approach to the audit process. Engaging Lean principles and tools, the company was able to address the top costs in both the domestic and international processes and design a roadmap to year-after-year audit cost reductions. First year savings ranged from 15% to 20% (or $1M to $1.3M).
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